February 13, 2006

"Iraq has been a very major market for AWB, and a profitable market. AWB will now have to find alternative markets for its grain," said Grant Saligari, senior equities analyst at Commonwealth Bank of Australia.

The Iraq tender had been seen by Australian industry analysts as providing the first indication of whether AWB's international export program would be affected by allegations it paid kickbacks under the now-defunct Iraqi oil-for-food program.

A 2005 UN report accused the AWB, the main exporter of food to Iraq in the 1990s, of paying up to $222 million to Saddam Hussein's government under the program.

An Australian government-appointed inquiry under Supreme Court Judge Terence Cole is now looking into whether AWB broke Australian laws in its oil-for-food deals with Iraq.

Outgoing AWB managing director Andrew Lindberg, under intense questioning at the inquiry, acknowledged on January 19 that AWB had deceived the UN by not disclosing service fees and other charges in wheat contract information.

Lindberg quit last week...

The AWB said it was determined to rebuild its reputation with customers, growers and shareholders.

Australian PM John Howard has now gagged public servants from talking about the issue, refused to expand his enquiry's terms of reference to include government involvement, and angrily denied claims that his government was aware of the kickbacks to Saddam.